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Cost Allocation Plans, Rate Model, Identifying System Efficiencies/Leveraging Funds.

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Presentation on theme: "Cost Allocation Plans, Rate Model, Identifying System Efficiencies/Leveraging Funds."— Presentation transcript:

1 Cost Allocation Plans, Rate Model, Identifying System Efficiencies/Leveraging Funds

2 TD Trivia

3 What day will Transportation Disadvantaged Day take place on in 2013? March 21, 2013

4 TD Trivia True or False, A CTC should not use the rate model to determine non-emergency Medicaid transportation rates because these are set by state statutes? False

5 TD Trivia How many years has the Commission been hosting the Transportation Disadvantaged Best Practices & Training Workshop? 20 Years!

6 TD Trivia True or False, the rate model comprehensive budget spreadsheet tab cover two years of calculations? False – It’s 3 years

7 TD Trivia Name the two best ever TD Commissioners.

8 Your Thoughts What did you hope to learn in this session?

9 Cost Allocation Plan Should develop plan before CTD rate model – Allocation plan should support 1 st year of financial model Any rate(s) adopted by a CTC should be supported by an exclusive cost pool made up of projected identifiable and allocable costs

10 Cost Allocation Plan Should be cost-based Assigning costs to multiple distinct cost pools (services/rates) Amount of expenditure dependent on measure related to the provision of service – Assign number of employees to cost pool – Allocate overall costs among different cost pools Fully allocated Allocated indirect

11 General Major classifications of costs – Administration (overhead: executive direction, administrative and clerical, finance & accounting, etc.) – Management (specific to TD program: customer eligibility, scheduling, dispatch, customer record keeping, invoicing, etc.) – Operations (direct operations: driver labor, vehicle capital and operating costs, insurance, etc.)

12 Methodology Basis for allocation – Cause-and-effect – Benefits derived – Fairness, or ability to bear Ethics Change

13 Methodology Ratio / Percentage based – % of personnel – % of benefit Use based – Number of trips per program – Number of miles or hours Space based – Square footage – KEEP BASIS REASONABLE!

14 Direct Costs Direct program benefit – Program specific personnel – Fuel – Vehicle Easily traceable back to specific program

15 Indirect Costs Not program specific Timeliness Consistency Accuracy Audit - AID – Accumulation – Identification – Distribution method

16 Uncollectable Budgeted Costs The following should not be considered for rate-making purposes: – Co-pays not paid; – No-show, no pay; – Match requirements; and – Shortfalls in other rates.

17 Non-Recoverable Costs The following should not be considered for rate-making purposes: – Costs covered by federal, state, or local capital acquisition or operating subsidies; – Costs covered by co-pay/farebox revenues; – Costs covered by special contracts for service; and – Costs covered by any other special rate or revenue.

18 Unallowable Cost Liquor / Lotto Lobbying Bad debt Who’s gotten a speeding ticket while on work related travel? Entertainment Land

19 Allocation Model Cost Model – Revenue Eligibility No duplications – Expenses – Data Passenger miles Passenger trips Assign line item expense accounts Calculate average unit costs Document rationale for assigning costs

20 Cost Allocation Activity

21 2012-13 Rate Models Common Areas of Interest

22 General Develop a cost allocation plan for the services being priced. Start with the latest version of the Rate Model from CTD website. Currently Ver 1.4. Process approval from CTD staff before going to the LCB. Ideal time is around January.

23 Comprehensive Budget Tab 1 of 2 Enter correct fiscal period in cells H10 and H11. Provide explanation for revenues. – Identify source of funds when not specific; – Explain changes 10% or $50,000 between any two periods. – Identify use of revenue between capital VS trips VS system subsidy; – Confirm grant funding match ratios and sources; – Explain all rows with “other”; – Identify bus pass program revenue & expenses; – Confirm expenses for fixed route service only reflect what you pay for bus passes; – Include any in-kind or contributed services;

24 Comprehensive Budget Tab 2 of 2 Provide explanation for revenues (continued) – – Include allocated indirect cost unless fully allocated in each line item; – Check that grant funded equipment and match is indicated in rows 175-178; – Confirm you haven’t omitted any non-grant funded depreciation expenses in row 171; – List all Contracted Transportation Service providers; and – If program revenue has been realized, notate how these gains are reinvested in the following year(s).

25 Budgeted Rate Base Tab Confirm proper revenue and match by trip purchasing grants/programs have been moved to column “J” (the Rate Base). At a minimum this includes: – At least 10% match for CTD non-sponsored grant; – At least 10% match for Shirley Conroy grant; – At least 50% match for 5311 operating grants drawn down on a unit price basis; – Whatever the match is for other capital grants. If making a rate base adjustment in cell F184, confirm use of proper positive or negative number.

26 Program Wide Rates Tab Confirm the passenger mile figures you enter are the passenger mile basis you use in your billing (If you bill by the passenger mile).

27 What's Next? Analyze feedback and comments from workshop. Update Rate Model for next cycle accordingly. Review the 2009-2013 summary report of Rate Model pricing available on CTD website (and handout).

28 Index Card Response Activity

29 Identifying System Efficiencies & Leveraging Resources

30 System Efficiencies TD bus pass program and/or flex-routes Issue reduced fare/TD ID cards ADA bus stop improvements Gas vouchers Client and volunteer mileage reimbursements Trip scheduling criteria Maximizing vehicle load Fare policy and enforcement

31 System Efficiencies FREE LABOR!

32 Leveraging Funds Use TD funds to match New Freedom grants as available Identify in-kind matching opportunities Corridor grants/Section 5311 Partnerships with colleges Vehicle sharing among recipients and sub- recipients of federal programs More coordinated planning!

33 Coordination Efforts Education and marketing efforts – Elected officials – Human Service Agencies – Customers – General Public You have resources – CTD – UWR – CTAA – FDOT

34 Efficiency Activity What is your agency’s major cost contributor? Identify an efficiency improvement implemented to reduce costs. Explain if the improvement was effective. How did you get management, staff, or customer buy-in on the improvement?

35 Questions

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